Zusammenfassung
Find the latest edition of our monthly publication. Discover insights on Central Banks' policies, US yields, and global financial conditions impacting investment strategy.
Topic of the Month
How long can the Central Banks’ divergence last
Key Takeaways
- The divergence of Central Bank policy rates is unlikely to significantly impact exchange rates, as other core currencies are not weak relative to recent history and market expectations of terminal rates in Europe are similar to those in the US.
- Global financial conditions are strongly influenced by US longend yields, and there is a risk of the term premium rising if US deficit and debt projections deteriorate.
- Although not in our baseline scenario, an energy supply and price shock would weaken European exchange rates and rapidly transmit to domestic inflation.
Macroeconomics, Geopolitics, and Strategy
- Macroeconomic focus: China’s policy choices in a divided world
- Macroeconomic snapshot
- Main and alternative scenarios
Global Investment Views
Rotation and broadening in equities has started
US mega caps significantly outperformed the rest of the US markets in the first half of the year, driven by better-than-expected economic activity, AI exuberance and superior earnings. Looking ahead, we see a potential for a rally-broadening, which will not be linear and is likely to have multiple legs.
Macroeconomic and financial market forecasts
July/August 2024
